S.B. 82

1

INDIVIDUAL INCOME TAX - EARNED
2 INCOME TAX CREDIT
3 2005 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Thomas V. Hatch
6
7 LONG TITLE
8 General Description:
9 This bill amends the Individual Income Tax Act to provide for a state earned income
10 tax credit.
11 Highlighted Provisions:
12 This bill:
13 . allows certain taxpayers to claim a nonrefundable state earned income tax credit;
14 . requires the Division of Finance to make transfers from the General Fund to the
15 Uniform School Fund equal to the amount of state earned income tax credit
16 claimed; and
17 . grants rulemaking authority to the State Tax Commission to provide procedures for
18 reporting the amount of state earned income tax credit claimed to the Division of
19 Finance.
20 Monies Appropriated in this Bill:
21 None
22 Other Special Clauses:
23 This bill has retrospective operation for taxable years beginning on or after January 1,
24 2005.
25 Utah Code Sections Affected:
26 ENACTS:
27 59-10-136, Utah Code Annotated 1953

28
29 Be it enacted by the Legislature of the state of Utah:
30 Section 1. Section 59-10-136 is enacted to read:
31 59-10-136. Nonrefundable earned income tax credit -- Division of Finance to
32 transfer from the General Fund into the Uniform School Fund an amount equal to the
33 amount of state earned income tax credit claimed -- Commission rulemaking authority.
34 (1) (a) Except as provided in Subsection (1)(b), for taxable years beginning on or after
35 January 1, 2005, a taxpayer may claim as provided in this section a nonrefundable earned
36 income tax credit equal to 5% of the amount the taxpayer is allowed as a federal earned income
37 tax credit in accordance with Section 32, Internal Revenue Code, for the taxable year.
38 (b) Notwithstanding Subsection (1)(a), a taxpayer may not claim an earned income tax
39 credit under this section if the taxpayer's federal adjusted gross income, as defined in Section
40 62, Internal Revenue Code, is greater than:
41 (i) $12,500 for a taxpayer other than a:
42 (A) husband and wife filing a single return jointly; or
43 (B) head of household; or
44 (ii) $25,000 for a:
45 (A) husband and wife filing a single return jointly; or
46 (B) head of household.
47 (2) A taxpayer may not carry forward or carry back any earned income tax credit
48 allowed under this section.
49 (3) (a) Subject to Subsection (3)(b), the Division of Finance shall transfer at least
50 annually from the General Fund into the Uniform School Fund an amount equal to the amount
51 of earned income tax credit claimed under this section.
52 (b) (i) The commission shall report to the Division of Finance the amount of earned
53 income tax credit claimed under this section.
54 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
55 the commission may make rules providing procedures for reporting to the Division of Finance
56 the amount of earned income tax credit claimed under this section.
57 Section 2. Retrospective operation.
58 This bill has retrospective operation for taxable years beginning on or after January 1,

59 2005.




Legislative Review Note
as of 12-7-04 8:44 AM

Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel